Heading Into the Spring Holiday Break

April 2, 2015

Most financial markets will be closed tomorrow, observing Good Friday.  Passover and Easter will keep volume light through Monday.  Attention in the meantime is fixed upon nuclear talks between Iran and a U.S.-led coalition of Western Governments as well as the equally unresolved Greek debt talks.  The release today of U.S. trade figures and the “account” of the ECB monetary policy meeting on March 5 also hold interest.

Oil prices rose yesterday above $50 per barrel on news of a smaller-than-assumed rise in U.S. weekly inventories.  WTI is down 0.9% today at $49.63 per barrel, and a deal with Iran, should such be reached, would likely trigger a new downleg.  Comex gold is 0.4% softer at $1,203.10 per troy ounce.

The rise in oil prices negatively impacted the dollar, which shows overnight losses of 0.6% against the Swissie and Australian dollar, 0.5% versus the euro, 0.2% relative to the kiwi, and 0.1% vis-a-vis the yen.  The dollar rose 0.2% against sterling and is unchanged against the loonie and yuan.

Japan’s Nikkei rebounded 1.5%.  Elsewhere in the Pacific Rim, share prices gained 1.0% in Taiwan, 1.1% in India, 0.8% in Hong Kong and 0.7% in Australia.  The main move in Europe is a 0.7% drop in the Athens Stock Exchange index.  Equities have dipped 0.1% in Germany, Italy and Switzerland, risen 0.1% in Britain, and remain flat in Spain and France.

The ten-year Japanese JGB yield fell four basis points as a new fiscal year kicked off in Japan.  A key advisor to Prime Minister Abe has strongly urged the Bank of Japan to ease policy further at this month’s half-year review, and monetary base data released today softened further. 

The 10-year British gilt yield slid a basis point, and the 10-year German bund remains steady by extremely low at 0.17%.

On-year growth in Japan’s monetary base slowed for a third straight month in March.  Such was 35.2% versus 38.2% in December and averaged 36.4% in the first quarter versus 54.1% in the year-earlier first quarter.  Japanese stock and bond transactions generated a net JPY 1.261 trillion capital outflow last week after an outflow of 2.315 trillion yen in the previous week.

India’s manufacturing purchasing managers index rebounded from February’s 5-month low of 51.2 to a 2-month high of 52.1 in March.

Hong Kong’s private purchasing managers index slid back under 50 to print at 2-month low of 49.6 in March.  Jobs have been shrinking since March 2014, and the growth of both orders and output was minuscule.  Hong Kong’s struggles reinforce concerns about the outlook for Chinese demand.

Australia’s trade deficit swelled to a 5-month high in February of A$ 1.256 billion versus an upwardly revised A$ 1.003 billion in January and A$ 503 million in December.  Imports rose twice as fast as exports in the latest reported month.  A number of analysts think the Reserve Bank of Australia may cut rates next week.  But a measure of price expectations posted the largest monthly rise in almost a year, creating some doubt about what the RBA will do.

The British construction PMI index fell to a 5-month low of 57.8 last month from 60.1 in February and a 17-month high of 57.6 back in December.

J.P. Morgan’s world manufacturing purchasing managers index edged down 0.1 points to 51.8 in March.  Output grew more strongly, but orders growth slowed.  Prices remained below 50, connoting a slight decline.

Consumer prices in Cyprus, one of the eurozone’s weakest economies, fell 1.9% in the year to March, a half percentage point more than the 12-month drop in February.  Romanian producer prices dropped 1.7% between February 2014 and February 2015. 

South Korea’s current account surplus of $6.44 billion in February was 2% narrower than in the previous month.

Italy’s public sector deficit narrowed to 2.3% of GDP in the fourth quarter from 3.0% in 3Q14.

Scheduled U.S. data releases on this day before Good Friday include the trade deficit, factory orders, the NAPM New York manufacturing index, and weekly jobless insurance claims.  Note that the Labor Department will be releasing its March labor force survey at the usual time on Friday.  There will be a flurry of activity right after and then most folks will head off.  Back to today, Canada also is slated to report trade data.  There is a candidate’s debate tonight in the U.K. with elections scheduled for May 7.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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